Quarterly Loss Is US $942 Million for Deutsche Telekom

[London, ENGLAND] Top European phone company and Internet
player Deutsche Telekom posted a billion euro (US $942
million) loss for the fourth quarter to the end of
December 2000, according to Bloomberg’s analysts.

Deutsche Telekom issued what it called a “preliminary
indication of the corporate group’s results for the
2000 financial year,” without breaking down the figures
into quarters.

The loss will worry investors, even though Deutsche
Telekom’s majority-owned mobile subsidiaries added
15.4 million new subscribers in the 2000 financial year
— a staggering increase by any standard. Even U.K.
subsidiary One 2 One developed “very pleasingly”
according to its German parent by doubling in size.

Investment analysts may also be inclined to compare the
Deutsche Telekom results to those from Europe’s biggest
business software publisher SAP, also announced on Tuesday.
By contrast they show fourth quarter profits rising 16
percent to EUR 366 million (US $343.9 million).

The reason for Deutsche Telekom’s loss is its high
spending on UMTS licenses and corporate acquisitions.
Last year it spent around US $15 billion on third
generation licenses, and the amortization and interest
for them cost the company around EUR 0.45 billion
(US $0.42 billion).

Deutsche Telekom insists it had a very good year
if investors care to “exclude the effects of…”
various consolidations and purchases. It mentions
that gross debt actually decreased at the end of
December 2000. That debt is now just EUR 60.3 billion
(US $56.8 billion)

The heavy loss will force Deutsche Telekom to scale
back its expansion, as confirmed by Chief Executive
Ron Sommer last month.

Shares in Deutsche Telekom dipped by over four
percent on the news. However, the market still
values the company at over US $100 billion.

Acquisitions by Deutsche Telekom have inflated
the figures for the total number of employees.
Although the number of people employed by Deutsche
Telekom AG decreased by 10,000, the purchase of
debis Systemhaus and Slovenske Telekomunikácie
added 20,500 and 13,400 employees respectively.

Deutsche Telekom reported that its Internet
subsidiary T-Online gained more than 3.2 million
new subscribers during 2000. The total is now 7.9
million, a figure that includes Club Internet,
Ya.com and T-Online in Austria. There are now
1.4 million Internet subscribers to T-Online ISPs
outside Germany.